Archive for Thursday, August 8, 2002

ImClone chief Waksal indicted

August 8, 2002


— ImClone chief executive Samuel Waksal, whose arrest on insider trading charges has cast suspicion on Martha Stewart, has been indicted, apparently after attempts to cut a deal with prosecutors broke down.

The indictment was not immediately available. But federal prosecutor Michael Schachter said it charges Waksal with bank fraud, perjury, obstruction of justice and other counts.

In June, Waksal a friend of Stewart's was arrested for allegedly tipping off members of his family to sell ImClone stock.

Waksal's lawyers and prosecutors had been trying to work out a plea bargain before the deadline for indicting him. A plea bargain presumably would have required him to reveal whether he warned family and friends, including Stewart, to sell.

Lawyers for Waksal did not immediately return calls for comment.

Prosecutors accused Waksal of secretly advising his daughter, Aliza, and father, Jack, to sell on Dec. 27 after learning in advance that his biotech company's effort to win approval for a highly touted cancer drug had been rejected by the Food and Drug Administration.

The stock collapsed after the FDA decision was announced.

Investigators also targeted Stewart after learning that the home-design magnate sold nearly 4,000 shares on Dec. 27.

Stewart has said she simply had a standing order to sell her stock when it went below $60. But doubt has been cast on that assertion because she and her Merrill Lynch broker, Peter Bacanovic, differ on when the order was placed.

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